The role of eCommerce connectivity for Your Product Team - Part III

I’ve written about the impacts of connectivity for your IT Team and Sales Team. For part 3 of the series on the impact of connectivity on your organization, I will focus on Product teams. Since Product teams need to be able to sell the value of a connectivity strategy to your organization it is important that they understand everything that it takes to make your integration strategy successful. 

Customer data changes how a business operates. When it is properly collected and shifted around, it can help organizations increase customer acquisition and retention rates, and eventually lead to a surge in revenue. The growth in companies enhancing their connectivity strategy, especially with eCommerce integrations, has been driven by the need to deliver more functionality and faster time-to-market. You can imagine that if every single feature was built in-house, it would take a huge amount of time and investment to build all the functionality needed to run your SaaS service. You will rarely see companies building their own CRMs nowadays. The same can be said about integrations. According to a recent State of the API survey, the average time SaaS respondents answered to complete one API integration is 41 days. This is why there is a growing shift to integration platforms that can help you manage your connectivity strategy in the long-term.  

Integrations are a critical component to capture market share for your product. Including easy integration options for commerce systems and marketplaces as part of your product has many business advantages that can boost your success. However, before deciding to build your own integrations to commerce systems and marketplaces, your Product Team should ask themselves important questions such as: 

• What is the business impact if you do create your own integrations?  
• How much additional revenue or how many more customers are you going to get?  
• Does having certain integrations get you closer to your goals?  
• Is your company ready for additional costs of managing the infrastructure complexities of these integrations? Your merchants will need hand holding and managing integrations that are widely used by merchants will drive up your infrastructure costs. 

As the Product team, you need to consider all the challenges that lie ahead and ensure that your company is ready to support this initiative with not only engineering resources but with everything it entails across all departments. 

First, the challenges... 

• Which integrations will you work on first?  

There are hundreds of different commerce systems, marketplaces and POS systems that you can integrate with. How will you decided and based on what data which markets are worth pursuing. A common problem we see with our customers is that they listen to the loudest voices from their Sales & Marketing teams. The issue is that this is not a data-driven approach for a successful connectivity strategy. Proper market insights are needed in order to establish your connectivity strategy.  

• How will you increase your product’s revenue by building integrations? 

Building integrations is a big investment, both in time and money. So how will you increase revenue from it? How will your product and organization be better off after this investment? There are many ways to approach this. Here are just a few of the several paths to capitalizing on your integrations. 

• Improve sales conversion. Increase revenue of your core product because integrations to the commerce systems and marketplaces your merchants sell on makes it more attractive and easier to sell.  
• Increase Topline Revenue. Monetize the integration itself by charging for API usage or the integration itself. In order to do this, you’ll need to build additional tracking mechanisms, increasing the complexity of the integration. 
• Sell professional services based on the integrations to specific commerce systems and marketplaces. This might require a professional services team to execute properly.  
• Sell applications. Use the integrations as a platform to build new components which you can sell for additional revenue through app marketplaces of commerce systems you integrate with. You could also charge a markup on apps built by others and sold in your marketplace. 

• Significant increase in operating expenses 

Establishing your integration strategy brings with it not only technical but business challenges as well. Here are some non-engineering areas you’ll most likely need to invest in to support your integrations: 

• Technical documentation. You will need somebody with experience in technical and API documentation. 
• Product marketing. Creating the message and spreading the word to developers and CTOs is very different than targeting business users. If you do not have the expertise in-house, you’ll have to ensure that your company is willing to invest in it. 
• Sales enablement and Sales support. Enterprise-level merchants usually ask their technical resources to evaluate products that include integrations. Your Sales team will need to include people that can speak to a technical audience and close deals.  
• Partner management. Building and nourishing a partner network is not easy. Enabling the connectivity is just the beginning. Your organization would need to invest in additional people and expenses within Business Development, Partner Management, Marketing, etc. 
• Support. Your Support team needs to be able to answer questions about your integrations and understand when it has an actual bug, and when the problem comes from any custom code built on top of the API. You will probably need to invest in some technical resources to handle the support. 

• Security and performance. A must-have 

As you plan your connectivity strategy, you will need to make sure to take into consideration security and performance from the very beginning. Merchants using your integrations are using it to run their businesses, so if your integrations are slow, buggy, or have security vulnerabilities, it will affect your merchants and your partners using the integrations.  

•  Lost opportunity cost regarding your development resources 

Your in-house development resources are finite. What features of your core product will not be developed because your resources are focused on building and maintaining integrations instead of your core product. This can put you at a disadvantage when your competitors use integration platforms and get to focus on their core products while you are trying to keep up building in-house integrations. Even if 25% of your resources are focused on integrations, that means that you’re still operating at a disadvantage to competitors that are sourcing their integrations from a platform instead of building them in-house to try and catch up. Instead, why not make your connectivity strategy your competitive advantage?  

Now, for the advantages of a successful integration strategy.  

• Scale at a quicker pace 

Connecting with other commerce platforms and marketplaces through their APIs allows you and your product to fast track adding features, functionality and tools that would otherwise take you and your team a lot longer to build. No matter how fast you release new integrations, you’ll never be able to meet the needs of every single merchant. If your product is targeted towards midsize and enterprise markets, then having this ability is a must. Your product strategy needs to detail which integrations you need to build first, so you can provide connections to the most critical markets your merchants sell on as soon as possible. 

• Enable professional services revenue 

If your merchants are looking for an integration you don’t have or needs specific customizations, having an integration directory, where you offer your list of available integrations, can help you close the deal and bring in additional revenue in the form of professional services. This also help keep your core development team focused on developing strategic features that will solve problems for your critical mass of users. 

• Build a partner network. 

Even though your Sales team is limited, a partner network can bring scalability and additional revenue to your organization. Partners can integrate into your product or build custom tools and functionality on top of your product. The key advantage here is that partners will help you sell your product because they want to sell their products or services on top of it. By creating a partner network to leverage your connectivity, you can automatically create new sales channels and scale your Sales and Marketing teams in a way that otherwise might not be possible. 

The bottom line is that adding integrations to your product brings a significant competitive advantage and increased revenue. In contrast, not having integrations your merchants need could be the difference between rapid adoption or being left behind by the competition. 

To take this even further, here are some of the bonus benefits for using an eCommerce Integration Platforms as a Service (e-IPaaS):  

• Expanded Market Reach – integrating with commerce systems and marketplaces quickly enables new markets for your product, immediately. 
• Quick Proof of Concept – connect within days instead of months and test out new commerce systems.  
• Low Effort – the development effort is low for the business impact / value provided. 
• Value Over Time – as Commerce Systems and Marketplaces mature, develop and update their APIs, costs build up in maintaining the updates and upgrades. A low initial up-front cost for the initial integration will always pay off over time. 

One way to quickly assess the potential impact of a commerce system or marketplace integration is to monitor how many potential customers are interested. This can be done by creating advanced landing pages to promote an integration before you commit to building one and drive some traffic to see how many sign-ups are generated. You could also ask your sales team to mention the possibility of an integration to your enterprise merchants and partners and keep a record of the interest to see if there’s a genuine business appetite or not. 

We tackle this topic by providing our customers a way to offer over 500 commerce systems and marketplace integrations to their merchants in an automated way to track interest per platform using our Market Pulse tool.  

What are your main goals regarding integration for the next 12 months? Comment or DM me and we can connect on how you can plan your connectivity strategy for the next few years.